Sketchy police nonprofit pitches in Las Vegas

The telephone call came into the New to Las Vegas world headquarters. A fellow with the first name of Jackson said he was with the fundraising company Charity Appeal. He said he was soliciting money for the National Police and Troopers Association to fund “death benefits” for families of fallen officers. Jackson was hopeful I could be counted upon for a donation.

Gee, I said, that sounds interesting. How much of the money given by donors in the past couple years went for death benefits?

“That’s a great question,” Jackson said in his slight Southern twang. “But I’m relatively new here. I’ll transfer this over to my supervisor.”

The phone line promptly went dead.

Here are possible reasons the call was disconnected so abruptly: Almost none of the money raised goes to death benefits–in some years not even a dime. More than 90% of the funds raised went to outside fundraisers. Virtually all of what was left went to a labor union that owns the NPTA name to help negotiate collective bargaining agreements for its members and lower their dues.

The NPTA is not a charity at all–contributions are not tax-deductible–but falsely portrays itself as a charity. That makes its use of a fundraiser with the name Charity Appeal–based, as it turns out, in the Nevada state capital of Carson City–even more misleading and deceptive.

It’s bad enough the NPTA is part of a police union–International Union of Police Associations, AFL-CIO–whose members allegedly are sworn to uphold the law and do the right thing. But to me, what’s even worse is that this flim-flam has been going on for years and charity regulators haven’t done anything about it. Maybe they’re afraid of police retaliation.

You might wonder why I know all this stuff. As a financial journalist for Forbes and other outlets, I’ve written about nonprofits for decades, mostly big legitimate ones but also smaller smarmy ones. Before relocating this summer to Las Vegas, I lived for five years in Seattle, where I had a blog with the not-surprising name of NewToSeattle.com. I started writing up the many dodgy outfits that called asking for money.

The NPTA/IUPA was a repeat caller–such that I nominated it as a candidate for my newly invented list of America’s Stupidest Charities, which can be found elsewhere on this page. Criteria for a nomination is simple: nonprofits that call me asking for money after being the subject of an unfavorable post. Can it get dumber than that? (You can read my previous reports on NPTA/IUPA by clicking here and here.)

It was just a matter of time until the nonprofits that called me in Seattle would catch up with me in Las Vegas. NPTA/IUPA has the honor of being the first.

I invite you to download a copy of the organization’s latest IRS form 990 filing, for the fiscal year ending March 31, 2015, by clicking here. Then follow along as I explain my merry analysis.

For the year, the IUPA/NPTA received $9.7 million in gifts. But $8.9 million was spent on fundraising expenses, almost all of it to five professional telemarketers. So the NPTA/IUPA’s fundraising efficiency–the percent of donations remaining after the cost of fundraising–was only 8%. In evaluating true charities (which the NPTA/IUPA most certainly is not), the charity watchdog Better Business Bureau Wise Giving Alliance says fundraising efficiency should be no lower than 65%. (By the way the NPTA/IUPA refused to provide information to the BBB, another screaming red flag.)

Put another way, 92 cents of every dollar donated got nowhere near the nonprofit. (Charity Appeal was not one of the five paid telemarketers that year; Nevada corporation records say the firm was formed earlier this year. But two of the five were based in Nevada–Outreach Calling in Reno and Courtesy Call, right here in Las Vegas.)

Of the remaining $800,000, the amount of money listed on the tax return being spent on a death benefit for fallen officers, the emotionally evocative main purpose touted by the fundraiser who called me, was–zero. It was also zero in the fiscal year ending March 31, 2014. In the year ending March 31, 2013, two death benefits totaling $7,000 were paid. So out of $29 million raised over those three years with public records, exactly $7,000 was paid out in those highly touted death benefits. That works out to 1/50th of 1%.

Back to 2015. Some $12,500 was paid to individuals in the form of five $2,500 scholarships “for students pursuing an advanced degree in law enforcement.” Another $35,000 went out in grants to other organizations, including $10,000 to a handicapped children foundation in Florida–not exactly a police-and-trooper-like nonprofit–and about $10,000 to help fundraising efforts of other law enforcement organizations.

So of the $9.7 million received in donations, only $47,000 was spent in ways that some might find charitable, even if not entirely police-related. That’s not even one-half of 1% of the money raised. One does not have to be a charity expert to know this is pretty bad.

What about the remaining $760,000 or so? That money was spent for the NPTA/IUPA’s only stated purpose, which the tax return plainly said was “to bargain for just compensation and better benefits for approximately 12,000 members.” Based on other data on the return, I’d say that $760,000 reduced the dues members paid by a third.

Now, I have no problem with labor unions, or even labor unions that seek public contributions to defray their union activities. But I think they should be pretty upfront when they cold-call would-be donors.

It’s easy to understand why the NPTA/IUPA emphasizes death benefits for fallen officers in its pitch. How far do you think the organization would get with “Hi, we’re a labor union raising money so that we can negotiate higher pay that might raise your taxes”?

If you’re counting on Nevada regulators for protection or even knowledge, good luck. In what looks to me like an astonishing loophole in Nevada law, nonprofits raising money in Nevada only have to register and make a minimal public filing if contributions to them are tax-exempt. As a labor union, the NPTA/IUPA is a nonprofit but not tax-exempt. Ergo, no registration.

In 2013, the IUPA was ranked No. 5 on the Tampa Bay Times‘ now-famous list of “America’s Worst Charities” based on the large amount of money raised that went to fundraisers. A spokesman for the union told the paper at the time in what I would call a rare burst of candor, “While the percents (returns) are not what we would like them to be, it’s money we otherwise wouldn’t have to support our officers.”

I called the NPTA/IUPA headquarters in Sarasota, Fla., to ask why death benefits are being touted when so little money goes out that way, and why the NPTA depicts itself as a charity. A person there acknowledged no death benefits were paid in 2014 and 2015, but said $30,000 was paid out earlier this year. (Assuming the same level of fundraising, that would bring up the total death benefits/contributions ratio over four years from 1/50th of 1% to 1/10th of 1%.)

But the worker insisted the IUPA/NPTA really was a charity, although I couldn’t understand the reasoning. By that logic, Jimmy Hoffa ran a charity. Let’s say we agreed to disagree.

One last thing: Jackson, who called me, is not a real person, but rather a computer-generated voice controlled by a operator listening in and directing the responses. That’s why I giggled when Jackson said he was new there and couldn’t answer my question about the death benefits for fallen troopers. It probably was the operator who ended the call. Telemarketers just hate it when persons they call start asking questions.

But if past practice holds, I’ll get more calls from the NPTA/IUPA. You’ll be among the first to know.